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Online travel agents in firing line over hotel price bans


Proposed law could significantly damage OTAs’ bottom line

After similar moves by France and Germany, Austria will attempt to ban online travel agents (OTAs) from forbidding hotels from offering accommodation at lower prices on their own websites.

 

The new legislation tackles “parity clauses” in contracts between OTAs and hotels, which allow booking sites such as Booking.com from claiming they always offer the cheapest online rates.

 

 

According to Reuters, the common practice has led to complaints by rivals and scrutiny by regulators.

 

"At issue is that companies do not have to offer the same price as they currently do on the (online) platform but have the opportunity to make other arrangements, which increases hoteliers' room for maneuver," Austrian Vice Chancellor and Economy Minister Reinhold Mitterlehner told a news conference.

 

With lawmakers set to review the proposed legislation after their summer recess, Booking.com defended the practice, saying it increased transparency and comparability.

 

"If you want to be sure to get the cheapest hotel price you would be forced to comb through countless homepages to in the end only be able to compare a fraction of the possible offers," Booking.com's Europe, Middle East and Africa managing director Peter Verhoeven said in a statement.

 

Should accommodation providers be able to advertise lowest prices on their own websites?

 

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Written by: Mark Harada
Published: 13 July 2016


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